Many flights cancelled in Germany as pilots of Lufthansa's budget airline go on strike

Airplanes of German air carrier Lufthansa are pictured at the Fraport airport in Frankfurt, on Aug 29, 2014. Pilots at Lufthansa's budget carrier Germanwings staged a six-hour strike on Friday, disrupting travel plans of thousands of people returning from summer holidays and putting pressure on Lufthansa management in a pension scheme dispute. -- PHOTO: REUTERS

Pilots' union Vereinigung Cockpit (VC) wants Lufthansa to maintain an early retirement scheme that allows pilots to retire at 55 and still receive up to 60 per cent of their pay until state pension payments kick in. The airline argues that there is no need for the scheme, given rising life expectancy and a court ruling that pilots can now work until the age of 65.

The dispute is set against the backdrop of a Lufthansa overhaul to boost competitiveness against no-frills rivals and Gulf carriers, seeking to lift annual group operating profit to 2 billion euros (S$2.5 billion) in 2015, up from its forecast 1 billion euros in 2014.

A three-day nationwide strike by Lufthansa pilots in April over the same issue effectively grounded the airline and wiped 60 million euros off its first-half profit.